Introduction

If you have flipped open the cover of this book, or tapped the screen on your iPad or Kindle to arrive at this introduction, I hope you won’t be disappointed by not having found another dry, dull how-to book on investing. The Big Win: Learning from the Legends to Become a More Successful Investor has been written to read like a collection of entertaining short stories while providing invaluable insights, culled from the experiences of some of the best investors in the business, that you can integrate into your investment strategy in order to drive greater profitability.

My first book, The Billion Dollar Mistake: Learning the Art of Investing Through the Missteps of Legendary Investors (John Wiley & Sons, January 2010), profiled 11 top investors, their life stories, their paths to success, and their biggest mistakes. While virtually all investment books lay out a step-by-step strategy that, if adhered to, will allow for the achievement of “financial independence” or “success beyond your wildest dreams”—sarcasm intentional—The Billion Dollar Mistake is unique in its approach—focusing on what not to do. It is a “don’t do what I did and get rich” kind of book. The mistakes in each chapter are the garden-variety missteps that we all make, investors big and small, the only difference being the number of zeros to the left of the decimal point. In fact, most professional investors assiduously relive their mistakes, dissecting them over and over both as involuntary penance and, more productively, in an effort to understand what went wrong so that it doesn’t happen again. George Santayana put it best¹ when he said: “Those who cannot remember the past are condemned to repeat it.”

This follow-up, The Big Win: Learning from the Legends to Become a More Successful Investor, possesses many of the same characteristics of my first book. In fact, I used the same criteria for selecting those profiled on the following pages: compelling life stories, awe inspiring financial achievements, and most important, investment philosophies that could be successfully and relatively easily assimilated by the average investor in order to achieve greater profitability. But I also wanted to add a touch of diversity to the investments I examined while ensuring that the underlying tenets of each strategy were transferrable to and from all asset classes including stocks, bonds, real estate, and commodities. And to really spice it up, I added one of the best short sellers into the mix, offering you, the reader, the opportunity to make money in any type of market—bull, bear, or sideways. Importantly, each chapter concludes with takeaways that make it easy to grasp how you can—in fact, should—take advantage of each lesson. As noted, the core principles of any investment discipline should be transferrable to different asset classes; there are many ways to generate return on your capital, and stocks may not always be the best vehicle for wealth creation. In fact, one of the professional investors featured herein remains skeptical of the ability to consistently generate return by owning any stocks.

Virtually all those included herein blazed new trails in finance: Renée Haugerud, a woman, is an extremely successful hedge fund manager, a minority class if there ever was one; R. Donahue Peebles is perhaps this country’s wealthiest African American real estate developer; Martin Whitman was at the forefront of distressed debt investing; Chuck Royce, a pioneer as a value investor in small capitalization companies; Jim Rogers, a former partner of George Soros, was an early hedge fund innovator in commodities; Jim Chanos is perhaps the best short seller of all time; Lee Ainslie started out working for Julian Robertson at Tiger Management and now runs one of the world’s largest equity hedge funds; and Alfred Taubman is a multibillionaire real estate investor and inventor of the modern shopping mall.

The Big Win examines the other side of the trade discussed in The Billion Dollar Mistake. This book illustrates what went right for the eight investors featured, explaining how they parlayed their personal strengths into fortunes. Each chapter provides an analysis of an investor’s biggest win, not necessarily in terms of monetary gain, although that is also present, but rather in terms of an investment that epitomizes their style. The chapters conclude with a takeaway laying out the most important aspect of each legend’s strategy.

I hope you will find this book informative and entertaining—learning by osmosis, so to speak—as you enjoy the personal stories of these individuals who all came from humble backgrounds to achieve great wealth and success. Most of all, you should come away from this book with an appreciation of how you can use your personal strengths to profit in any market in any asset class.

Note

1. George Santayana (1863–1952) was an American philosopher. Historians, librarians, and trivia experts have engaged in spirited debate over his exact words, but the meaning is very clear.